Wednesday, January 24, 2018

This is the Chinese economic reality that no one talks about.

via Reuters.
 China’s state-owned enterprises will face more mergers and bankruptcies as the government overhauls the lumbering state sector, the head of the country’s state asset regulator told Reuters.

In a rare interview with a foreign news outlet, Xiao Yaqing, chairman of the State-owned Assets Supervision and Administration Commission (SASAC), stressed Beijing’s commitment to streamline its bloated and debt-ridden state-owned sector and create conglomerates capable of competing globally.

China embarked on a revamp of its state-owned enterprises (SOEs) in 2015 to tackle rising corporate debt and also to make them more profitable and responsive to market forces.

It has claimed progress in its SOE restructuring through mergers, reductions in excess capacity, the relocation of workers, closure of “zombie” firms, and implementing a controversial scheme under which debt is converted into equity.
Story here.

Why is this on a military blog?  Simple.  I believe China is the number one threat to US survival as a nation.  Additionally I believe that we have a number of boosters/ill informed people that want the status quo to continue.

They can't see a future where internal pressures inside China couple with their building military power to push a future conflict.

They're wrong.

If you don't have time to read the entire article then drink in the last paragraph that I highlighted in red.

Reductions in excess capacity?

Relocation of workers?

Closure of zombie firms?

Debt converted into equity?

The Chinese leadership is walking a fine line.  One slip up and they risk internal turmoil.  People without jobs...even fake jobs are unhappy people.

Want to know when China will strike?  Start watching the Chinese economy and how these "reforms" work out.  If they're going badly then you'll see nationalism rise.  When that happens dig your boots in.  The next thing you'll see is a Chinese horde rushing your line.

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